EXHIBIT 1.2
EXECUTION COPY
$350,000,000
CATERPILLAR FINANCIAL SERVICES CORPORATION
(A DELAWARE CORPORATION)
4.875% SENIOR NOTES DUE 2007
TERMS AGREEMENT
June 24, 2002
To: Caterpillar Financial Services Corporation
0000 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Ladies and Gentlemen:
We understand that Caterpillar Financial Services Corporation, a
Delaware corporation (the "Company"), proposes to issue and sell $350,000,000
aggregate principal amount of its debt securities (the "Debt Securities") (such
securities also being hereinafter referred to as the "Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the underwriters named below (the "Underwriters") offer to purchase,
severally and not jointly, the principal amount of Underwritten Securities
opposite their respective names set forth below at the purchase price set forth
below.
Principal
Amount of
4.875%
Senior Notes
Underwriters due 2007
------------ --------------
X.X. Xxxxxx Securities Inc. ........................... $140,003,500
Xxxxxxx Xxxxx Barney Inc. ............................. 140,003,500
ABN AMRO Incorporated ................................. 11,665,500
Banc of America Securities LLC ........................ 11,665,500
Banc One Capital Markets, Inc. ........................ 11,665,500
Barclays Capital Inc. ................................. 11,665,500
Xxxxxxx, Xxxxx & Co. .................................. 11,665,500
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated .... 11,665,500
------------
Total ................................................. $350,000,000
============
The Underwritten Securities shall have the following terms:
Title: 4.875% Senior Notes due 2007 (the "Notes").
Rank: Senior Debt Securities.
Aggregate principal amount: $350,000,000.
Denominations: In denominations of $1,000 and integral multiples
thereof.
Currency of payment: U.S. dollars.
Interest rate or formula: 4.875% per annum.
Interest payment dates: June 15 and December 15 of each year, commencing
December 15, 2002.
Regular record dates: June 1 or December 1 immediately preceding the
applicable interest payment date.
Stated maturity date: June 15, 2007.
Redemption provisions: The Notes will be redeemable as a whole at any time
or in part from time to time, at the Company's option,
at a redemption price equal to the greater of (i) 100%
of the principal amount of the Notes or (ii) the sum of
the present values of the remaining scheduled
payments of principal and interest thereon from the
redemption date to the maturity date (exclusive of any
accrued interest) discounted to the redemption date on
a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury
Rate plus 12.5 basis points, plus, in each case, any
interest accrued but not paid to the date of redemption.
2
"Treasury Rate" means, with respect to any
redemption date for the Notes, (i) the yield,
under the heading which represents the average
for the immediately preceding week, appearing
in the most recently published statistical
release designated "H.15(519)" or any
successor publication which is published
weekly by the Board of Governors of the
Federal Reserve System and which establishes
yields on actively traded United States
Treasury securities adjusted to constant
maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to
the Comparable Treasury Issue (if no maturity
is within three months before or after the
maturity date for the Notes, yields for the
two published maturities most closely
corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate
shall be interpolated or extrapolated from
such yields on a straight line basis, rounding
to the nearest month) or (ii) if that release
(or any successor release) is not published
during the week preceding the calculation date
or does not contain such yields, the rate per
annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable
Treasury Price for that redemption date. The
Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
"Business Day" means any calendar day that is
not a Saturday, Sunday or legal holiday in New
York, New York and on which commercial banks
are open for business in New York, New York.
"Comparable Treasury Issue" means the United
States Treasury security selected by an
Independent Investment Banker as having a
maturity comparable to the remaining term of
the Notes to be redeemed that would be
utilized, at the time of selection and in
accordance with customary financial practice,
in pricing new issues of corporate debt
securities of comparable maturity to the
remaining term of such securities.
3
"Independent Investment Banker" means either
X.X. Xxxxxx Securities Inc. or Xxxxxxx Xxxxx
Barney Inc., and their respective successors,
or, if both firms are unwilling or unable to
select the Comparable Treasury Issue, a
nationally recognized investment banking
institution which is a Primary Treasury Dealer
appointed by the Company.
"Comparable Treasury Price" means, with
respect to any redemption date for the Notes,
(i) the average of five Reference Treasury
Dealer Quotations for that redemption date,
after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (ii)
if, after seeking at least five Reference
Treasury Dealer Quotations and excluding the
highest and lowest Reference Treasury Dealer
Quotations, the Independent Investment Banker
obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all
such quotations.
"Reference Treasury Dealer" means (1) X.X.
Xxxxxx Securities Inc. or Xxxxxxx Xxxxx Barney
Inc., and their respective successors,
provided, however, that if any of the
foregoing shall cease to be a primary U.S.
government securities dealer in New York City
(a "Primary Treasury Dealer"), the Company
will substitute for such dealer another
Primary Treasury Dealer and (2) any other
nationally recognized Primary Treasury Dealer
selected by the Independent Investment Banker
and acceptable to the Company.
"Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer
and any redemption date, the average, as
determined by the Independent Investment
Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount)
quoted in writing to the Independent
Investment Banker by that Reference Treasury
Dealer at 5:00 p.m. (New York City time) on
the third Business Day preceding that
redemption date.
4
Holders of Notes to be redeemed will receive
notice thereof by first-class mail at least
30 and not more than 60 days before the date
fixed for redemption. If fewer than all of
the Notes are to be redeemed, the Trustee
will select the particular Notes or portions
thereof for redemption from the outstanding
Notes not previously called, pro rata or by
lot, or in such other manner as the Company
shall direct.
Unless the Company defaults in payment of
the redemption price, on and after the
redemption date interest will cease to
accrue on the Notes or portions thereof
called for redemption.
Sinking fund requirements: None.
Listing: None.
Rating requirements: None.
Black-out provisions: None.
Fixed or variable price offering: Fixed Price Offering.
Public offering price: 99.963% of the principal amount of the
Notes, plus accrued interest, if any, from
June 27, 2002.
Purchase price: 99.613% of the principal amount of the
Notes, plus accrued interest, if any, from
June 27, 2002.
Form: Except as otherwise provided in the
Prospectus and Prospectus Supplement
relating to the Notes, the Notes will be
issued in book-entry form registered in the
name of Cede & Co., as nominee for The
Depository Trust Company.
Other terms and conditions: The Company will pay certain additional
amounts if certain U.S. withholding taxes
are imposed.
Closing date and location: 9:30 a.m., New York City time, on June 27,
2002 at the offices of Xxxxxxxx & Xxxxxxxx,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
5
Each Underwriter, severally and not jointly, represents and agrees that:
(a) (i) It has not offered or sold and, prior to the expiry of a period
of six months from June 27, 2002, will not offer or sell any Underwritten
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995;
(ii) It has only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of Section 21 of the Financial
Services and Markets Xxx 0000 ("the FSMA")) received by it in connection with
the issue or sale of any Underwritten Securities in circumstances in which
Section 21(1) of the FSMA does not apply to the Company;
(iii) It has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to any Underwritten
Securities in, from or otherwise involving the United Kingdom;
(iv) It will not offer or sell any Underwritten Securities directly
or indirectly in Japan or to, or for the benefit of any Japanese person or to
others, for re-offering or re-sale directly or indirectly in Japan or to any
Japanese person except under circumstances which will result in compliance with
all applicable laws, regulations and guidelines promulgated by the relevant
governmental and regulatory authorities in effect at the relevant time. For
purposes of this paragraph, "Japanese person" shall mean any person resident in
Japan, including any corporation or other entity organized under the laws of
Japan;
(v) It is aware of the fact that no German selling prospectus
(Verkaufsprospekt) has been or will be published in respect of the sale of the
Underwritten Securities and that it will comply with the Securities Selling
Prospectus Act (the "SSP Act") of the Federal Republic of Germany
(Werpapier-Verkaufsprospektgesetz). In particular, each Underwriter has
undertaken not to engage in a public offering (offenliche Anbieten) in the
Federal Republic of Germany with respect to any Underwritten Securities
otherwise than in accordance with the SSP Act and any other act replacing or
supplementing the SSP Act and all other applicable laws and regulations; and
(vi) The Underwritten Securities are being issued and sold outside
the Republic of France and that, in connection with their initial distribution,
it has not offered or sold and will not offer or sell, directly or indirectly,
any Underwritten Securities to the public in the Republic of France, and that it
has not distributed and will not distribute or cause to be distributed to the
public in the Republic of France the Prospectus Supplement, the Prospectus or
any other offering material relating to the Underwritten Securities.
(b) Except for registration under the Securities Act of 1933, as
amended, and qualification of the Underwritten Securities for offer and sale,
and the determination for their eligibility for investment, under the applicable
securities laws of such jurisdictions within the United States as the
Representatives may designate pursuant to Section 3(f) of Annex I hereto,
6
no action has been or will be taken by it that would permit the offer or
sale of the Underwritten Securities or any interest therein or
possession or distribution of the Prospectus Supplement or the
Prospectus or any amendment thereto or any other offering material
relating to the Underwritten Securities in any jurisdiction where action
for that purpose is required. Without prejudice to paragraph (a) above,
it has not and will not directly or indirectly offer, sell or deliver
any Underwritten Securities or any interest therein or distribute or
publish the Prospectus Supplement, the Prospectus or any other offering
material relating to the Underwritten Securities in or from any
jurisdiction except under circumstances that will result in compliance
with all applicable laws and regulations and will not impose any
obligations on the Company, except as provided herein. Subject as
provided above, each Underwriter shall, if required by applicable law,
furnish to each person to whom it offers, sells or delivers the
Underwritten Securities a copy of the Prospectus Supplement and the
Prospectus. No Underwriter is authorized to give any information or to
make any representation not contained in the Prospectus Supplement or
the Prospectus in connection with the offer and sale of the Underwritten
Securities.
All of the provisions contained in the document attached as Annex I
hereto entitled "CATERPILLAR FINANCIAL SERVICES CORPORATION--Debt
Securities--Underwriting Agreement" (the "Underwriting Agreement") are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. Terms defined in such document are used herein as
therein defined. Each reference to Underwriters in the Underwriting Agreement so
incorporated herein by reference shall be deemed to refer to the Underwriters as
defined in this Terms Agreement.
7
Please accept this offer by signing a copy of this Terms Agreement in
the space set forth below and returning the signed copy to us.
Very truly yours,
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
XXXXXXX XXXXX XXXXXX INC.
By: /s/ Xxxxxxxxx Land
-----------------------------------
Name: Xxxxxxxxx Land
Title: Vice President
Acting on behalf of
themselves and the other
named Underwriters.
Accepted:
CATERPILLAR FINANCIAL
SERVICES CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Treasurer
